Text 3 Trade Barriers

No matter how compelling the logic of the case for free trade, in fact a wide variety of barriers to free trade do exist.

1. Tariffs are excise taxes on imported goods; they may be imposed for purposes of revenue or protection.

Revenue tariffs are usually applied to products which are not produced domestically, for example, tin, coffee, and bananas in the case of the United States. Rates on revenue tariffs are typically modest and their purpose is to provide the federal government with tax revenues.

Protective tariffs, on the other hand, are designed to shield domestic producers from foreign competition. Although protective tariffs are usually not high enough to prohibit the importation of foreign goods, they put foreign producers at a competitive disadvantage in selling in domestic markets.

2. Import quotas specify the maximum amounts of commodities which may be imported in any period of time. Frequently, import quotas are more effective in retarding international commerce than are tariffs. A given product might be imported in relatively large quantities despite high tariffs; low import quotas, on the other hand, completely prohibit imports once the quotas are filled.

3. Nontariff barriers (NTBs) refer to licensing requirements, unreasonable standards pertaining to product quality and safety, or simply unnecessary bureaucratic red tape in customs procedures. To illustrate: Japan and the European countries frequently require their domestic importers of foreign goods to obtain licenses. By restricting the issuance of licenses, imports can be effectively restricted. Great Britain bars the importation of coal in this way.

4. Voluntary export restrictions (VERs) are a relatively new trade barrier by which foreign firms “voluntarily” limit the amount of their exports to a particular country. VERs, which have the effect of import quotas, are agreed to by exporters in the hope of avoiding more stringent trade barriers. Thus Japanese auto manufacturers agreed to a VER on exports to the United States under the threat of higher U.S. tariffs or the imposition of low import quotas.

Text 4 Your Rights when Buying Goods

When you buy something from a shop, you are making a contract. This contract means that it’s up to the shop – not the manufacturer – to deal with your complaints if the goods are not satisfactory. What do we mean by satisfactory?

The goods must not be broken or damaged and must work properly. This is known as “merchantable quality”. A sheet, say, which had a tear in it, or a clock that didn’t go when you wound it would not pass this test.

The goods must be as described – whether on the pack or by the salesman. A hairdryer which the box says is blue should not turn out to be pink; a pair of shoes the salesman says is leather should not be plastic.

The goods should be fit for their purpose. This means the purpose for which most people buy those particular goods. If you wanted something for a special purpose, you must have said exactly for. If, for instance, the shop assures you that certain glue will mend broken china, and it doesn’t, you have a right to return it.

If goods are faulty when you first inspect or use them, go back to the shop, say that you cancel the purchaser and ask for a complete refund. If you prefer, you can accept a repair or replacement.

If the goods break down through no fault of yours, after you have used them for a time, you may still entitled to some compensation. But if your washing machine worked perfectly for a while and then broke, you could only expect some of the purchase price back. You and the supplier must negotiate a reasonable settlement.

If you have to spend money as a direct result of goods being faulty, you can also claim this from the shop. You could, for example, claim the cost of using a laundry while the washing machine wasn’t working.

There are four golden rules while buying goods:

1. Examine the goods you buy at once. If they are faulty, tell the seller quickly.

2. Keep any receipts you are given. If you have to return something, the receipt will help to prove where and when you bought it.

3. Don’t be afraid to complain. You are not asking a favor to have faulty goods put right. The law is on your side.

4. Be persistent (but not aggressive). If your complaint is justified it is somebody’s responsibility to put things right.